TaxTMI 
TaxTMI 
2020 (1) TMI 734
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....with with the consent and at the request of learned counsel for the parties. The counsel appearing for the respondents waives service. 3. The challenge in this petition is to the order dated 30.03.2019 by which the Principal Commissioner of Income Tax has dismissed the petitioner's applications under Section 264 of the Income Tax Act, 1961 (I.T. Act) seeking to revise the returns for Assessment Year (A.Y.) 2015-16 and the consequential orders made thereon. 4. It is the case of the petitioners that they are married to each other under the Portuguese Civil Code and therefore the provisions of Section 5A of the I.T. Act are applicable to them. This section provides for apportionment of income earned by the spouses governed by the Cod....
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....e deed dated 05.05.2014, sold the Seraulim property, which was already converted as stock in trade for a consideration of Rs. 90 lakhs and necessary entries were made in the books of account. 7. The petitioners, on 07.06.2016 filed their return of income for A.Y. 2015-16. However, it is the case of the petitioners that they erroneously and inadvertently computed the profits from sale of Seraulim property under the head of "income from capital gains" and arrived at short term capital gain of Rs. 20 lakhs after giving effect to the provisions of Section 5A of the I.T. Act. This return was filed in ITR- 4. However, since no business income was shown, the relevant details in ITR-4 relating to the balance sheet was reflected as "0" as per the....
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....eturns for 2015-16, is not at all indicative of any dubious act but, rather, the applications under Section 264 were filed precisely to correct such inadvertent error. 10. Mr. Jain points out that necessary book entry had been made in the books of account/ledgers to indicate the conversion of investment in Seraulim property as stock in trade. He submits that applying the principles set out in Circular dated 29.02.2016, which is to be read along with the provisions of Section 45(2) of the I.T. Act, there was ample material on record to evidence the conversion. He submits that inasmuch as all these relevant aspects have not been taken into consideration and since the impugned order proceeds on the basis of irrelevant observations, the same....
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....ll for our determination. 15. On perusal of the impugned order, we find that respondent no.1 has adverted to the returns for A.Y. 2012-13, 2013-14, 2014-15 and 2015-16 and thereafter observed that the entry in the context of Seraulim property is not evident even under the head of "Investment". It is not quite clear as to whether this is one of the reasons for rejection of the petitioner's applications under Section 264 of the I.T. Act. If this is one of the reasons, then, Mr. Jain, is quite correct in his submission that the returns for the said assessment years have not been read in their entirety. In any case, the petitioners, do have a plausible explanation in this regard and were they informed that this is one of the tentative re....
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.... a stock in trade and this position was reflected not only in the books of account/ledgers but also in the balance sheet. 18. According to us, although, it is true that neither the books of account/ledgers nor the balance sheets were produced by the petitioners along with their applications under Section 264 of the I.T. Act or during the course of personal hearing thereon, the interests of justice would require that the petitioners are given an opportunity to produce this material before respondent no.1. The impugned order, makes reference to certain reasons or circumstances, which, may not be entirely relevant. In any case, the impact of such irrelevant circumstances on the ultimate decision is also not quite clear from perusal of the i....
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....set aside and the respondent no.1 is directed to once again consider the petitioners' applications under Section 264 of the I.T. Act and to dispose of the same on their own merits and in accordance with law. We grant the petitioners liberty to place additional material on record before the respondent no.1 and we request respondent no.1 to dispose of the petitioners' applications under Section 264 of the I.T. Act as expeditiously as possible and in any case within a period of four months from today. 21. We make it clear that none of the observations in this order may be treated as conclusive or binding one way or the other. The issue as to whether the petitioners' applications under Section 264 of the I.T. Act shall be allowed....